Adapting Environmental Policy for the Developing World

Jan 9, 2012|
Peter Nelson

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Environment for Development discussion papers published in 2011 identified, analyzed, and provided possible solutions to health, climate change, and agricultural challenges presented by limited resources and emerging governments. Market-based instruments and contingent valuation methods, among other tools, helped shape the research and discussion on obstacles faced by developing nations.

Many U.S. power-exporting multinationals have set up shop just beyond the Mexican border to sell electricity to the United States. Allen Blackman, Santosh Chandru, Alberto Mendoza-Domínguez, and A.G. Russell explore the air-quality issues resulting from that approach in "Health Impacts of Power-Exporting Plants in Northern Mexico" by assessing the benefits of offsetting polluting emissions from two plants in Mexicali, Baja California. Their research shows that air emissions from border areas of Mexico have extensive health impacts, the majority of which are associated with ozone pollution in the United States. The researchers recommend changing U.S. law to require power-exporting plants to reduce or offset their emissions or to provide incentives for them to do so.

Climate and Agriculture

In agriculture-based economies, farmers and policymakers are affected by both long-term climate change and season-to-season fluctuations in weather. These papers explore both.

The loss of agricultural productivity due to climate change is expected to have adverse economic effects on developing nations. In "Climate Change and the Ethiopian Economy: A Computable General Equilibrium Analysis," Zenebe Gebreegziabher, Jesper Stage, Alemu Mekonnen, and Atlaw Alemu simulate the impact of climate change in Ethiopia over a 50-year period, comparing the outcomes of two different scenarios for total factor productivity growth. The results from their study indicate that, with climate change, reduced agricultural productivity during that timeframe may lead to a loss of some 30 percent of income, compared with the no-climate-change baseline.

Mintewab Bezabih, Salvatore Di Falco, and Mahmud Yusef examine smallholders’ crop choices in response to weather uncertainty in "Farmers’ Response to Rainfall Variability and Crop Portfolio Choice."The authors find that, in the near-absence of formal insurance markets, farmers in low-income countries are more likely to select less risky crops with less return. They conclude that development initiatives aimed at encouraging risk-taking and accumulating assets need to address credit access and off-farm employment policies as well as weather insurance policies. Additionally, crop insurance may be one area where climate policy and development policy may be linked effectively.

An analysis of the impact of water scarcity on the electricity sector in the United States demonstrates how water scarcity shifts electricity production from hydropower to natural gas, resulting in increased carbon dioxide emissions.